Ben Habib:
The only weapon in the Remain camp’s armoury was Project Fear.
It was first launched to suggest that a simple vote to leave the EU would result in an instant deep recession with the loss of a million jobs and potentially a run on the banks. Well, that theory was virtually instantly debunked. The UK ended 2016 as the fastest growing economy in the G7.
Since then the UK economy has gone from strength to strength. Far from a million jobs being lost, a million jobs have been created. Unemployment is at an all-time low and wage growth has finally begun to establish itself.
The mantra then shifted to: “well we have not yet left the EU and, once we do, there will be a deep protracted recession”. The wheels on that claim came off on 21 January this year when the FT (a bastion of Remain) admitted that mainstream economic forecasters were no longer predicting a recession in the event of a no-deal Brexit. Sufficient government and EU planning had already been done, by that stage, in order to avoid it. In fact, as we now know, our government had done precious little no-deal planning – Hammond had refused to allow it to do so – seems to me that a deep Brexit-induced recession was never on the cards.
The next nail in the coffin for Project Fear came in March when Mark Carney declared that the financial services sector was ready for no-deal. To the extent that subsidiaries of financial institutions had to be set up on the mainland and jobs moved, this had already taken place. The cost in terms of jobs to achieve this feat: a total of 1,500, as compared to the 75,000 job losses predicted in 2016. Services accounts for some 70 per cent of the UK’s GDP and the financial sector is a large component of this. Bang went a crucial leg of Project Fear. And, in case Remainers have not noticed, the financial services sector is performing pretty damn well right now.
The next port of call for Project Fear was, yes you guessed it, our ports. Theory had it that they would be so snarled up that there would be a lettuce crisis in the UK. It must be so annoying that both Douglas Bannister, CEO of the port of Dover and Jean-Marc Puissesseau, President of the combined ports of Calais and Boulogne, have declared that their ports can cope with any disruption thrown up by a no-deal Brexit. Indeed Mr Puissesseau described scaremongering over disruption as “La Bullsh**”. A hammer blow for Yellowhammer.
So where is Project Fear currently resting? Its suggestion now is that the UK will grow more slowly than it otherwise would, by up to 0.5 per cent of GDP per annum and that an additional £30 billion per annum in government debt would be wracked up. Forgive me if I do not instantly panic!
Here’s the problem with Project Fear: it is groundless. Its evidence, to the extent it has any, is formed in economic forecasts based on using the status quo as a starting point and then removing those elements of trade that depend on the Single Market without making any allowance for additional government preparations, government spending, monetary responses, the huge advantage of a floating currency and, last but not least, the extremely adaptive nature of UK businesses.
Businesses will not sit idly by while the trading and regulatory environment changes. Businesses adapt very quickly. Indeed, times of change can be exceptionally good for business, encouraging them, as it does, to reinvent themselves and modernise. It is also important to bear in mind that the vast majority of businesses in the UK are SMEs and do not export goods. In fact, only 12 per cent of the UK’s GDP depends on any form of trade with the EU. The case for Project Fear was always overblown.
To win the economic argument, Remainers really had to make the case for a bright EU-led prosperous future. They could not do so because the EU, particularly the Eurozone, is sick, very sick. Interest rates have been in negative territory virtually since the onset of the credit crunch. There is high unemployment (particularly amongst the youth), a number of Eurozone countries are virtually bust, including France and Italy amongst them. The Euro has these countries locked in a death embrace. And the largest economy in Europe, Germany, is all but in recession.
In invoking Hilaire Belloc’s Jim: “…always keep a-hold of nurse, for fear of finding something worse..”; nurse at least had to be benign but the EU nurse is sclerotic and covered in warts. She is now tending to Project Fear on its deathbed.